Cefic, CIA issue Brexit guide

The European Chemical Industries Federation (Cefic) and the UK’s Chemical Industries Association (CIA) have jointly published a briefing note to support and prepare businesses for the eventualities of the UK leaving the EU, setting out practical considerations to maintain trade post-Brexit.

‘What you need to know - Practical considerations to maintain trade post Brexit’ is available via both associations’ websites and is all about the practical difficulties companies may face in complying with chemicals legislation. The two said that they were seeking “to minimise the challenges companies both in the EU and in the UK face to maintain REACH compliance”, in an industry with highly interconnected supply chains.

Whilst the focus is mainly on REACH registration compliance as a ‘licence to operate’, Cefic and the CIA stressed that companies should also consider other aspects of REACH compliance, other chemicals regulations, such as the CLP Regulation, the BPR and Prior Informed Consent, and trade issues like potential tariffs, IP, Rules of Origin, Incoterms and VAT systems migration in their planning.

“The European chemical industry is convinced that the best guarantee against market disruptions is the UK remaining in the REACH legislation, including their activity within ECHA,” the document states. It goes on to list the key issues, then give practical advice under three headings:

1. Maintaining access to EU single market: Considerations for UK-based businesses
2. Considerations for EU-based companies with UK supply and trade relationship
3. Implications of a future UK REACH for UK and EU27/EEA companies

Cefic subsequently warned that UK chemicals will be subject to WTO tariffs of up to 6.5% in the event of a ‘no-deal Brexit and that these will apply even for products being transferred to a subsidiary of the same company. Whilst there are ways to claim exemption from tariffs, these are subject to strict customs rules and controls.

In addition, if the UK forms a customs union with the EU, it must eliminate tariffs against any third countries where the EU has a free trade agreement in place. However, it will not automatically benefit from zero tariffs on its exports to those countries. It will first have to negotiate its own free trade agreements with them, something it appears to lack the number of experts to do. .